Indian shares advance as ruling party sweeps key state election
Updates for market close
By Bharath Rajeswaran
Nov 25 (Reuters) - Indian shares extended their rally on Monday after Prime Minister Modi's party and its allies scored a decisive win in the country's richest state of Maharashtra.
The NSE Nifty 50 .NSEI rose 1.32% to 24,221.9 points, while the BSE Sensex .BSESN gained 1.25% to 80,109.85. The benchmarks logged gains of 2.5% on Friday, their best session since early June.
On Saturday, the BharatiyaJanata Party-led National Democratic Alliance (NDA) won233 of 288 seats in Maharashtra, home to India's financial capital of Mumbai.The state has seen multiple regime changes over the last five years after an unclear mandate in 2019.
"Given the emphatic nature of the ruling NDA'svictory, markets will rise further as political instability in one of the most industrialised and economically important states comes to an end," said Abhishek Goenka, founder and CEO of IFA Global.
The Nifty and Sensex as well the broader small- and mid-caps slipped into correction territory in November on moderating earnings and foreign outflows.
Upbeat sentimentafter the election results could spur a mini risk-on rally as the government shifts its focus to spending and as valuations turn favourable for large-caps after thecorrection, said Gautam Duggad, analyst at Motilal Oswal.
HDFC Bank HDBK.NS, the heaviest weighted stock on the Nifty 50, rose 2.3%, while oil-to-telecom conglomerateReliance RELI.NS gained 1.7%.
State-owned banks .NIFTYPSU advanced 4.16%. They rose 3% on Friday on easing worries of credit risks from exposure to Adani group stocks.
High-weightagebanks .NSEBANK and financials .NIFTYFIN added about 2% each.
Six ofthe 11 Adani group stocks rose on Monday.
The conglomerate lost about $28 billion over the last twosessions as investors cut their exposure to the group after the U.S. indicted chairman Gautam Adani and seven others onalleged bribery charges.
Thegroup has deniedthe allegations, calling them "baseless".
Food delivery platform Zomato ZOMT.NS jumped 3.5% after it was selected to replace JSW Steel JSTL.NS on the Sensex on Dec. 23.
Reporting by Bharath Rajeswaran in Bengaluru; Editing by Rashmi Aich, Janane Venkatraman, Sumana Nandy and Sonia Cheema
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